Leaders of the 10-member ASEAN grouping have disagreed over the handling of maritime territorial disputes with China.

The public feuding has overshadowed talks ahead of the East Asia Summit, which was meant to strengthen trade and political ties.

ASEAN leaders had hoped to present a united front on the South China Sea dispute, before meeting Chinese Premier Wen Jiabao and US President Barack Obama for annual talks.

But that does not appear to be the case.

US President Barack Obama is widely expected to express concerns about the disputes.

President Obama and Chinese Premier Wen Jiabao are among the leaders of 18 nations in the Cambodian capital of Phnom Penh for the two-day East Asia Summit.

Repeating a long-held Chinese position, Premier Wen insisted on Monday that the disputes should not be "internationalised" and discussed at multilateral events such as the summit.

China, which claims sovereignty over virtually all of the sea, prefers to negotiate directly with its neighbours from the 10-member Association of South-East Asian Nations (ASEAN).

In a meeting on Monday, President Obama and ASEAN leaders agreed to support a regional code of conduct to manage disputes over claims in the sea, said a joint US-ASEAN communique.

ASEAN members Vietnam, the Philippines, Malaysia and Brunei, as well as Taiwan, also have claims to parts of the sea, which is home to some of the world's most important shipping lanes and believed to be rich in fossil fuels.

The rival claims have for decades made the sea a powder keg issue in the region. Chinese and Vietnamese forces engaged in clashes in 1974 and 1988 in which dozens of troops died.

After a long period of relative calm, tensions have risen over the past two years with the Philippines and Vietnam expressing concerns that China is becoming increasingly aggressive in staking its claim.

In one of the most serious incidents, Philippine and Chinese vessels became locked in a stand-off at a contested shoal in April.

The tensions have led to some bruising diplomatic confrontations this year and overshadowed some regional meetings where the participants typically prefer to focus on improving economic ties.

At the East Asia Summit, the first day was dominated by infighting over the issue among the ASEAN bloc.

Cambodia, this year's ASEAN chair and a close Chinese ally, said the 10 nations had agreed not to "internationalise" the disputes, thus giving an important diplomatic victory to China.

But the Philippines quickly denied that it had agreed, with President Benigno Aquino rebuking Cambodian Prime Minister Hun Sen during one of the meetings on Monday.

"How can there be a consensus? A consensus means 100 per cent. How can there be a consensus when two of us are saying we're not with it," Philippine Foreign Secretary Albert del Rosario told reporters afterwards.

While he did not identify the other country opposing the agreement, diplomats said it was Vietnam.The feud echoed unprecedented infighting at an ASEAN foreign ministers' meeting in Phnom Penh in July, which ended for the first time in the bloc's 45-year history without a joint communique.

The Philippines and Vietnam had wanted the communique to make specific reference to their disputes with China. But Cambodia blocked the moves.

Trade deal

Despite the tensions, leaders were expected to make progress on important economic issues on Tuesday.

US President Barack Obama and South-East Asian leaders have launched an initiative aimed at expanding trade and investment ties between the United States and ASEAN.

The countries announced the start of the process at a meeting of the Association of Southeast Asian Nations, or ASEAN, in Cambodia, where President Obama is visiting Phnom Penh for a regional summit.

Actions outlined in the initiative - the U.S.-ASEAN Expanded Economic Engagement - are aimed at smoothing a path for Asian nations to link up with the Trans-Pacific Partnership, a trade agreement the United States is negotiating with ten countries in Asia and the Western Hemisphere, the White House said.

The joint action could also help Washington solidify its presence in a complex mosaic of regional trade and economic alliances in an economically vibrant region attractive to many U.S. businesses.

By seeking to open the door to the U.S.-led Trans-Pacific Partnership (TPP), the United States is keeping pace with another regional grouping - the Regional Comprehensive Economic Partnership (RCEP) - that is forming among South-East Asian nations and other countries in the region, including China and India.

Generally, that arrangement is expected to be less ambitious than the U.S.-led partnership and there is some concern that if the Washington's demands are too stringent, countries may lose interest in the TPP in favour of the RCEP.

Four members of ASEAN are part of the Trans-Pacific Partnership - Singapore, Brunei, Malaysia and Vietnam.

For its part, the Regional Comprehensive Economic Partnership includes Japan, South Korea, Australia, New Zealand, and the ten ASEAN members - but not the United States.

"ASEAN is the United States' fourth largest export market and fifth largest trade partner," the White House said in a statement. "ASEAN's continued rapid economic development creates opportunities for U.S. exports."

The United States also wants to broaden the reach of the Trans-Pacific Partnership to include ASEAN countries that are not part of the 21-economy Asia Pacific Economic Cooperation forum. These are Cambodia, Laos, and Burma.

Under the Expanded Economic Engagement initiative, participating countries will negotiate simplified customs procedures, and common investor protection and business conduct principles, the White House said.